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Veteran Contributor

Re: Ethanol PR

gored,

 

is it dry over there.  pretty odd we are taking canal water early because of all the runoff and at the same time the dust is a blowing.   As for all the spending,  I told a neighbor a while back, if you spend $200,000 a year on equipment, in 5 years your payments will be close to that, they said they never thought about that.  A lot of guys are spending ridiculous money.  Several guys here spent about $1million on new equipment the last two years, some this year alone.   Apparently someone over by Holdrege spent $1 million on a quarter, paid for with.... equity, not cash, sounds like a recipe for disaster to me.  He must of sold all his corn at $7.   The good times will end, probably no later than the end of 2012.  I am a big ethanol supporter, but I believe our days are now numbered, the opponents grow daily, the numbers are large.  We will be mariginalized back to a sideshow.   

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Senior Contributor

Re: Ethanol PR

There are areas that are a bit dry while there are areas that are in good shape.  A neighbor had some waterline trenched a week or so ago.  The guy trenching said there was pretty decent moisture all the way down.  We definitely wouldn't complain if we received an inch or so of rain.

 

I had heard the same story about the quarter over by Holdrege.  Here, we have guys renting ground for 65 bushels.  I'm not quite sure how profitable this can be by giving 1/3 of the crop away.  The biggest problem we're faced with here locally is the price guys are paying for dryland.  They're paying so much for dryland that they have to have a crop each year to make it work.  I guess most of them forgot we just ended a gruelling seven year drought a few years back.  Plus, there's a reason summerfallow practices were/are so common.   

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Veteran Contributor

Re: Ethanol PR

58 to 70 bushel rents here, $320 is the highest cash i have heard of.  holdrege guys must burn money in the fireplace, one bought a quarter east of me, absolute ####, a total swamp, he paid $550,000.   Drive 45 miles to farm a poop dump, must really have the fever, hee hee.   I offered a guy everything I have for $5500/ acre the other day, but he declined, dang.

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Senior Contributor

Re: Ethanol PR

A 70 bushel rent kind of makes $320 an acre pale in comparison.  We're pretty darn close to 6 bucks cash for new crop.  If anyone has any kind of method to hedge off farmland, I'd be very interested in the strategy.  Unfortunately, I'm not in a position to sell now and buy back later with my son almost through college.  The thing that's really scary to me is how much some of this land price jumped in just one year.  There was some dryland ground that sold last year in NW KS.  This year, there was some dryland ground that sold that nearly bordered it.  I thought last year's price was insane, but the ground that sold this year brought right at 24% more.  Last year, the wheat growing on the ground more than likely made 80+.  This year, they'll be lucky if the wheat growing makes 40. 

 

I read an article yesterday talking about how much additional income would be coming into the Aurora school district because of the inflating land prices.  How much of this additional cash do you suppose they're putting away in a rainy day fund?

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